-Sales decreased as a result of a decline in automotive production worldwide.

Operating income

3,315

(50)

-

-Operating income increased as a result of the Company's initiatives to reduce costs.

R&D

R&D Expenditure

(in millions of JPY)

FY2009

FY2008

FY2007

Automotive parts

162

106

104

R&D Activities

1) Development of technology to make lighter products-Automakers are demanding lighter weight products in order to improve fuel consumption. To respond to such requests, the Company is working reduce the weight of its seals by using resin and utilizing better foaming technology.-The Company started mass-production of glass run channels in fiscal year 2009, which ended in March 2010. The Company changed the material used in these runners, from rubber to TPE (Thermal Plastic Elastomer), and used foam in the framework. As a result, the weight was reduced by about 30%.

2) Development of technology to reduce noise-The Company is applying its technology in the area of foaming to further reduce the noise levels in its existing products. It is also developing improved noise-insulating products.

3) Development of technology to comply with environmental needs-The Company started researching next-generation materials for seals for possible use in environmentally friendly vehicles such as electric vehicles. It also is working on developing materials that are plant based.

Investment Activities

Capital Expenditure

(in millions of JPY)

FY2009

FY2008

FY2007

Overall

2,091

5,493

8,120

Automotive parts business

2,004

5,238

7,830

Automotive parts business

-The Company invested mainly to prepare facilities for producing new seals and to improve facilities as an investment for streamlining operations to reduce costs.

New Equipment Installations

Plant

Equipment to be introduced

Estimated amount of investment(million JPY)

Project Period

From

To

Nishikawa Rubber

Shiraki Plant(Hiroshima, Japan)

-Manufacturing equipment for automotive seals-Components for general industry

378

Dec.2009

Mar.2011

Asa Plant(Hiroshima, Japan)

-Manufacturing equipment for automotive seals-Components for general industry

-Manufacturing equipment for automotive seals-Components for general industry

64

Jan.2010

Mar.2011

Nishikawa Big Ocean Co., Ltd.(Hiroshima, Japan)

-Manufacturing equipment for automotive seals

78

Nov.2009

Mar.2011

Nishikawa Rubber Yamaguchi(Yamaguchi, Japan)

-Manufacturing equipment for automotive seals

169

Apr.2010

Mar.2011

Nishikawa Big Well Co., Ltd.(Hiroshima, Japan)

-Manufacturing equipment for automotive seals

84

Apr.2010

Mar.2011

Overseas subsidiaries

Nishikawa Tachaplalert Rubber Co., Ltd.(Thailand)

-Manufacturing equipment for automotive seals

471

Dec.2009

Dec.2010

Shanghai Nishikawa Sealing System Co., Ltd. (Shanghai, China)

-Manufacturing equipment for automotive seals

451

Dec.2009

Dec.2010

*Most of the domestic investments were for renewing or rationalizing facilities for new product launches, and generated no significant improvement in the Company's production capacity.*Investments in overseas subsidiaries were made to respond to more orders.